Big changes are on the horizon for Universal Credit in the upcoming year, which are set to have a significant impact on millions of claimants. Universal Credit, a benefit scheme managed by the Department for Work and Pensions (DWP), is currently being received by over eight million individuals in the UK.
Among the changes are adjustments to the standard allowance, the fundamental amount allocated in Universal Credit before any supplementary payments or deductions. While the standard allowance is set to increase, there are notable reductions expected in the health-related component for new Universal Credit applicants.
Universal Credit is gradually replacing various older benefits, with the transition expected to be completed by the end of March 2026. This shift includes replacing Tax Credits, Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit.
Individuals required to transition to Universal Credit will receive a “migration notice” via mail, providing a three-month window to commence their Universal Credit claims. However, certain circumstances will allow for the continuation of existing benefits, such as the ability to retain Housing Benefit for those residing in supported or temporary accommodations.
Anticipated from April is a 6.2% increase in the Universal Credit standard allowance, surpassing the inflation rate. This adjustment will elevate the standard allowance for individuals aged 25 and above from £92 to £98 per week and for couples from £145 to £154 weekly. Projections by the DWP suggest that by 2029, above-inflation increments will raise the average standard allowance by £775 in cash terms.
The health-related element of Universal Credit, known as Limited Capability for Work and Work-Related Activity (LCWRA), currently provides additional monthly payments to individuals facing health challenges or disabilities limiting their work capacity. Starting April 2026, new claimants granted LCWRA will receive £50 per week, down from the current £97 weekly rate, which will be frozen until 2029/30.
Existing claimants will continue to receive the £97 top-up weekly until 2030 without any annual increments. By 2030, the LCWRA component will be phased out entirely and replaced with a new health element tied to PIP (Personal Independence Payment).
In April 2026, a new subgroup under LCWRA, known as Severe Conditions Category (SCC), will be introduced for individuals with severe, lifelong disabilities and illnesses. Members of SCC will receive the higher current rate of the LCWRA element and will be exempt from routine reassessments, focusing on the impact of their conditions rather than the conditions themselves.
